Top Hat & Thimble - January 2026
Welcome to NextGen Competition’s monthly recap, delivering insider insights on antitrust battles, Big Tech shakeups, AI trends, and more.
Apple is falling behind on AI. What happened to the AI-powered ‘more personal Siri’ we were first promised in June 2024, which has been repeatedly delayed and has yet to launch?
In its Amicus Brief filed on 5 May 2025 in the US v. Google search trial, the main reason Apple argued that it should be allowed to continue receiving payments from Google for non-exclusive distribution was because those payments help close a competitive gap:
Compensation for search distribution provides a stable revenue stream that enables Apple to have patience and confidence to invest in innovative and disruptive technologies… Apple is, for instance, pioneering new AI technologies that enable users to more easily access and use their personal data—a product called Apple Intelligence. ... If this Court implements a remedy that strips Apple of all compensation it receives for distributing Google, that would threaten the pace of innovation, including with respect to AI partnerships that enable more effective competition with Google. [emphasis added]
Now, Apple has signed a multi-year, multi-billion dollar deal with Google to incorporate Gemini into Siri!
Not many details of the deal are forthcoming, but it lays bare Apple’s facetious claims that the money it receives from Google enables more innovation and effective competition with Google. Apple has over a hundred billion dollars of cash in hand – it never needed a cut of Google’s monopoly profits to innovate. This was always a flawed argument.
What these financial transfers do instead is to effectively eliminate competition between Apple and Google on AI and search and reduce Apple’s investment incentives. The Cupertino giant was just beginning to feel the heat as competitors like Samsung introduced superior Generative AI features on their smartphones, posing a challenge to Apple. However, this arrangement with Google allows Apple to largely neutralize this threat with minimal innovation and little investment.
The deal also locks up the most important distribution channels (Android and iOS) for AI voice assistants, which are likely to become key gateways for general internet search as well. As was shown in the US v. Google search trial, defaults matter. The best AI assistant for most consumers will be the one that’s already integrated into their smartphone.
The DOJ should challenge the Gemini deal between Apple and Google. It could do this during the appeal process in the search case. The Gemini agreement is another proof point for the need for stronger prohibitory injunctions on the type of default contracts that Google is allowed to sign for any of its services with Apple.
It may also be possible for existing or potential competitors with Google’s general search services like Microsoft, Perplexity, or OpenAI to challenge this agreement. These companies could argue that this multi-year Gemini agreement effectively circumvents the one-year term limit that the Court imposed in its Final Judgment on Google’s default agreements. And to the extent that general search queries on iPhones are increasingly made via an ‘upgraded’ Siri, the agreement undermines the data sharing remedies ordered by the Court.
The DOJ should also consider the anti-competitive effects of this agreement in its separate antitrust case against Apple. Is this not another example of how Apple maintains its market power by shutting out competitors from its ecosystem and degrading interoperability for competing products and services?
We will be following this matter closely.
Thank you for reading and your support.
With regards,
Sumit Sharma
Executive Director
NextGen Competition
Why Americans are Skeptical of Trump’s Big Tech Ties
Few things unite Americans more than our shared distrust of the bromance between Big Tech and Donald Trump. It’s a trend that has remained remarkably consistent throughout this Administration.
Last June, The New York Post reported that 54% of Trump voters – and 70% of voters overall – believe that Big Tech’s campaign to “suck up” to Trump was part of a cynical ploy to sway the president. This is a president after all whose fragile ego can easily be massaged by fawning praise and whose only north star is how much he and his family can profit from the Presidency.
Seven months later, reporting on a poll from The Tech Oversight Project, Axios cites that 61% of voters believe Big Tech has too much influence over D.C. policy.
49% of voters think Trump is “carrying out a pro-Big Tech agenda when he makes AI policy.” The poll also found that 69% think AI will eliminate or reduce job opportunities, and 45% think it will make the economy worse.
A December poll from right-leaning Rasmussen found the “overwhelming majority of Republicans and Democrats think Big Tech firms have “run wild” and that President Trump should do more to enforce antitrust laws.”
It goes on to find 84% of Democrats, 68% of Republicans, and 58% of unaffiliated voters “believe that it is at least somewhat likely that vigorous antitrust enforcement would lower prices for regular Americans.
None of this has stopped tech companies from flooding Washington. The biggest tech and AI firms spent a record $109 million on lobbying in 2025, and that is just what gets reported. The political spend is escalating too. Meta and Elon Musk are doubling down on efforts to elect tech-friendly candidates.
The result is a familiar disconnect. Voters are wary, but Big Tech’s influence operation keeps accelerating. If you’re waiting for that voter skepticism to change Trump’s tune, don’t hold your breath.
He nominated mega donor and corporate crony, David MacNeil, to serve at the FTC after Melissa Holyoak vacated her seat in November. Chair Andrew Ferguson seems more interested in auditioning for a job at DOJ than taking on Big Tech, echoing his boss’s disinterest in antitrust policy.
The bottom line: There is good reason voters are concerned about Big Tech’s alignment. But will antitrust make an appearance at the polls in November? We hope so – especially with candidates like Reed Showalter. Until then, expect the bromance to continue.
FTC Eyes Big Tech’s AI Talent Grab
Despite all that, we were pleased to see the Federal Trade Commission is now scrutinizing Big Tech talent acquisitions — deals where major tech firms like Amazon, Microsoft, Meta, and Google recruit startup teams without buying the company to sidestep merger reviews. This growing workaround by Big Tech has drawn antitrust attention for potentially entrenching dominance rather than fostering competition.
NextGen Competition has long warned against exactly this playbook. We’ve led letters urging the FTC to investigate Meta’s investment in Scale AI for effectively controlling critical AI infrastructure and poaching top talent and pressed the agency to challenge Amazon’s reverse acqui‑hire of Adept employees. Since Big Tech controls the critical inputs that many of these AI companies depend on, they exert tremendous power over these companies’ future.
The bottom line: Will Ferguson follow through with holding these companies accountable? Or is this just another tool for Ferguson and Trump to exert leverage over companies on unrelated issues, like browbeating companies over supposed ‘anticompetitive’ DEI hiring.
The Crackdown on Grok has Begun
We all watched in horror as Grok’s account on X generated approximately 3 million photorealistic sexualized images, including 23,000 of children. According to the Center for Countering Digital Hate, during the 11-day period beginning December 29 to January 8, the AI assistant generated millions of images with zero guardrails.
The backlash was swift and nearly universal. The European Union announced an investigation into Elon Musk’s platform, X, after authorities indicated that it had failed to stop the spread of harmful images. Three Democratic senators sent letters to Apple and Google, urging them to enforce their terms of service for app developers by removing the X and Grok apps from their app stores. Unsurprisingly, Apple seems willing to ignore its own terms when they’re violated by an app like X—one with political power.
At least 35 state attorneys general published an open letter to xAI demanding that it take immediate and comprehensive measures to protect the public and users of its platforms, particularly women and girls, who are the primary targets of non-consensual images.
While Democrats were swift to express outrage, Republicans mostly remained silent. Condemning all content moderation as “censorship” has apparently become core to the MAGA movement. The Administration attacked the EU and UK, threatening retaliatory tariffs for probes into the abusive images. The Administration used its tired soundbites to attack UK regulators for wanting to “curate a public square” and “suppress political viewpoints.” Even Vice President Vance chimed in, saying the attacks on American companies were “over garbage.”
After these threats from Musk’s cronies in the administration did not work, Musk backed down and X has implemented measures to restrict the feature. An example of how unified opposition can even check the billionaire oligarch. But it does little to stop the AI fueled surge in deepfake abuse.
It’s truly disappointing that the MAGA movement seems so indifferent to issues like child pornography and non-consensual nudity. But I guess we shouldn’t be surposed, it’s the same party protecting Jeffrey Epstein’s accomplices and that’s accepted this type of content as part of Musk’s business model to “hook users.“ While it may seem obvious, we appreciated Prime Minister Keir Starmer’s office responding clearly by stating, “This is about the generation of criminal imagery of children, women, and girls, and it is not acceptable.”
Other Competition News
Headlines from the past month you might have missed:
Playing the Long Game: It’s clear that the US’s antitrust push against Big Tech will be a long fight, but the lesson, at least according to Former AAG for Antitrust Jonathan Kanter, isn’t to stop, it’s to keep going. In the Financial Times, he got candid about why we’ve seen some legal setbacks, and what can be done to propel the antitrust movement forward.
“Convincing courts to exercise their authority was ‘one of the reasons why it’s important to bring big, ambitious cases’, he said. ‘Once you establish that the rule of law applies, in time, the remedies will follow. This was never going to be easy,’ he added. ‘We were basically reviving an area of law from the dead. And that takes time.’”
But a Hail Mary Pass Isn’t Always Needed: Just because we didn’t get a break-up of Google doesn’t mean the cases against Big Tech are totally failing. As James Hercher writes for AdExchanger:
But despite the fact that the very biggest tech platforms continue gaining ground and dodging hits, there are still reasons to value these antitrust suits, including the ones that end in modest, behavioral-only punishments instead of breakups.
This is an important point. You don’t need total victory to make a positive impact, Hercher even points to changes Google recently made to remove Unified Pricing Rules from its publisher ad stack in Europe. That change now lets publishers set channel-specific bid floors, a practice Google had previously blocked because it often resulted in less favorable terms for its own ad-tech. Pressure does move the needle. 👏
Things You Should Not Do: Users of ChatGPT will now be able to submit data such as medical records to the AI platform so that it can give more tailored responses to questions regarding health and nutrition. There are so many problems with this, we can’t even begin to describe them, but suffice it to say, you should not give AI access to your private health records. Don’t believe us? We went straight to the source.
Move Fast, Break Everything: In The Hill, Adonis Hoffman makes the case that unlike the monopolies of yesteryear, Big Tech is built differently, moves quickly, and “breaks accountability.”
Industries with physical assets operate under dense rulebooks built over decades. Broadcast media answers to licenses. Banks answer to regulators. Telecom providers meet access and interconnection requirements. Energy companies operate under public utility oversight. Big Tech routinely enters these same spaces while playing by entirely different rules.
Technology is not the enemy, and innovation is not the problem. Neither scale nor success is the sin. The problem is unbounded power operating inside systems built for a different century. Every prior industrial revolution required new rules to preserve competition, accountability and trust. Digital markets require the same response, even if harms appear less visible and more personal.
Big Tech Picking Up the Utility Tab? As communities across the country rally against the construction of data centers used to quench Big Tech’s insatiable thirst for electricity for AI, Big Tech is apparently picking up the tab of one of the main concerns: rising utility bills for consumers. President Trump took to Truth Social to proclaim that, “Data Centers are key to that boom, and keeping Americans FREE and SECURE but, the big Technology Companies who build them must ‘pay their own way.’”
It’s unclear though how this would work in practice. As Ella Nilsen writes for CNN, in responding to an inquiry from the Senate, Big Tech companies committed to covering the electricity costs for their data centers, but with little specifics. “These commitments do not explain how Big Tech companies – not American consumers – will bear the full cost of data centers,” said Sen. Elizabeth Warren.
In an opinion piece for the Ohio Capital Journal, Michi Trota writes, “Everyday people bear the costs of Big Tech’s hunger for profits. We pay it in rising energy bills, our worsening climate, our lack of access to safe water, increased noise pollution, and risks to our health and safety.”
Even if miraculously consumers pay nothing for Big Tech’s data centers, there’s been little to address the draining of valuable resources (like water), the effect of the data centers on the climate, and exactly what kind of effects these data centers will have on local communities.
Never Underestimate the Power of Public Shaming: That’s the message from Jessica Grose in her op-ed for The New York Times. In her piece, she points to the recent public outcry against Mattel following their announcement of an OpenAI collaboration on AI-powered toys after the debut of an AI teddy bear that was…not suitable for children. She writes:
It might be harder to shame the tech companies themselves into making their products safer, but we can shame third-party companies like toymakers, app stores and advertisers into ending partnerships. And with enough public disapproval, legislators might be inspired to act.
We may not be able to dictate how tech giants operate, but by hitting them where it hurts – their partnerships, their public image, and ultimately, their coffers, change is possible. 💪🏼
Ring Under Fire, Thanks to ICE: In a more disturbing use of tech, activists are crying foul at Ring after it was announced that the company would join forces with an AI surveillance tool. The company has pushed back on the accusations that they are working with ICE in any capacity, but “they stopped short of saying that video collected by Ring devices couldn’t be obtained by ICE or other federal agencies through legal means.” 😳
Until next month! In the meantime, follow us on X, BlueSky, and subscribe to our Substack for the latest on Big Tech, AI, and antitrust.